Vendors Use CES 2011 To Launch A Joint Flop: the Connected Home
There are times that high tech vendors collectively get an idea that they are sure will capture the zeitgeist and make all of them a ton of money. Last year, the big buzz was for 3D television. This year, you can hear a lot of noise about connected homes. Companies expect that consumers will see the blazing power of connecting everything in their homes to the Internet, so they can control lights, air conditioning, appliances, and entertainment in an integrated way.
There's just one problem. Often, such mega-trends are either badly timed or push things that vendors want to sell, not that consumers want to buy. The notion of the connected home has been around for at least a decade. In all that time, people haven't flocked to embrace it. Will this time be different because the technology is more sophisticated? Nope. Developing the waterproof bicycle doesn't make fish line up at your door any faster.
Connected home products at CES 2011
Let's look at some of the offerings this year:- Samsung pushes Internet-connected home theater products.
- GE (GE) shows energy-oriented products like smart meters, appliances that look for lower energy price periods to run, and home wind turbines and then calls it "technology to power the connected home of the future."
- Verizon Wireless (VZ, VOD) has wireless home control services to do things like run surveillance cameras, home and media control, and remote health services, and plenty of vendors want to sell home monitoring kits.
- Samsung also has an Internet-connected refrigerator as does LG.
Connections, sensible and not
You can't write off all the ideas. Internet-connected televisions have sold well -- although there's a difference between availability of a feature and actual use by the customers. And yet, Samsung's connected home theater products do make sense.Why not connect televisions and sound systems to the Internet, when so much music and video comes from there? This is a smart use of the smart home concept. Samsung manages to seem on the cutting edge while it actually follows just behind consumer trends to develop products that will find a market.
Unfortunately, the company's clean approach gets muddied with the Internet-connected fridge. This has been tried multiple times in the past by vendors that include LG, Samsung's big Korean rival. Since at least 2001. What, they're still not big sellers? How surprising as most people aren't clamoring to attach their refrigerators online. Why? Because it adds nothing to their lives that becomes screamingly obvious once you hear about it.
Sometimes a company will have a capability in some product models to show how technically ahead it is. This is a form of market positioning, and at that level, can make sense, just as the auto industry has made smart use at times of concept cars. However, wide adoption seems pretty unlikely, even if you could get a text message telling you to eat the damned yogurt before it goes bad.
Complex power management for homes is even less realistic. Hey, GE dudes, people don't even unplug their smartphone and MP3 player chargers when they're not using them. Do you think they're going to pay money for systems that might save them a small amount in return?
Sunk costs and ambitions
Once executives get on one of these bandwagons, they don't want to admit defeat. Not only does it look bad on the resume to have presided over a flop, but there's all that money the company has invested. Ah, but those are sunk costs, and spending more resources doesn't get them back. It's a classic error in decision making. One of the best recent examples comes from the 3D TV mania from last year's CES show. Consumers didn't take to the sets, largely because they had to wear goofy glasses that become one more thing to lose along with the television remote. So what is the reaction of the manufacturers? Produce 3D sets with cheap glasses:"We're meeting consumers' needs by eliminating some of the pain points" by addressing the 3-D glasses issue, said Tim Alessi, director of new product development at LG Electronics USA. "It's going to be the most comfortable viewing experience, just like going to the movies."No, Tim, you meet consumer needs by eliminating the glasses entirely. Make them a little more comfortable and cheaper and you still will have piles sitting in the warehouse.
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